South Africa's rand slips to 2-month low, stocks firm
Updates rand, bond prices; adds stocks
JOHANNESBURG, Aug 4 (Reuters) - South Africa's rand slipped to its weakest in two months on Tuesday, in a risk-averse mood amid fears over the pace of economic recovery as coronavirus cases surge.
At 1640 GMT the rand ZAR=D3 was 1.24% weaker at 17.3975 per dollar, after hitting a session low of 17.5350, its weakest since June 1.
"The COVID-19 pandemic still has the ability to shift market sentiment almost daily, giving rise to increased volatility, especially in emerging market currencies where there is no discernible long-term trend due to the sentiment changes," analysts at TreasuryONE said in a note.
"With the rand at the mercy of global movements, we expect the rand to continue to trade quite erratically within the R16.50 – R17.50."
Coronavirus infections continue to surge, with global cases crossing 18.35 million. The World Health Organization warned that the road to normality would be long, with some countries requiring a reset of strategy.
In South Africa, COVID-19 cases breached the 500,000 mark over the weekend, and the economy continued to show signs of a slower recovery as car sales and factory activity remained subdued.
On the bourse, the FTSE/JSE All Share Index .JALSH gained 0.75% to 56,249 points while the Top-40 Companies Index .JTOPI rose 0.74% to 51,951 points.
South African telecommunications giant, Telkom TKGJ.J closed up 4.87% to 28.00 rand, after the company announced it will now provide financial services.
Further gains were seen in the gold index .JGDLX, which rose 2.65%, with Harmony Gold Mining HARJ.J up 3.33% to 114.00 rand.
Bonds were weaker, with the yield on benchmark 2030 government paper ZAR2030= up 7 basis points at 9.350%.
(Reporting by Olivia Kumwenda-Mtambo and Tumelo Modiba; Editing by Lisa Shumaker)
((Olivia.Kumwenda@thomsonreuters.com; +27 10 346 1084;))
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